PRODUCT PLACEMENT EFFECTIVENESS: A CROSS-CULTURAL ANALYSIS Ciska Asriel Bachelor of Economics, Tarumanagara University, 2002 RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION In the Faculty of Business Administration International Business Specialist Program O Ciska Asriel 2006 SIMON FRASER UNIVERSITY All rights reserved. This work may not be reproduced in whole or in part, by photocopy or other means, without permission of the author APPROVAL Name: Ciska Asriel Degree: Master of Business Administration Title of Research Project: Product Placement Effectiveness: A Cross Cultural Analysis Supervisory Committee: Dr. Colleen Collins-Dodd Senior Supervisor Associate Professor, Marketing Dr. Mila Lazarova Supervisor Assistant Professor, International Business Date Approved: DECLARATION OF PARTIAL COPYRIGHT LICENCE The author, whose copyright is declared on the title page of this work, has granted to Simon Fraser University the right to lend this thesis, project or extended essay to users of the Simon Fraser University Library, and to make partial or single copies only for such users or in response to a request from the library of any other university, or other educational institution, on its own behalf or for one of its users. The author has further granted permission to Simon Fraser University to keep or make a digital copy for use in its circulating collection (currently available to the public at the "Institutional Repository" link of the SFU Library website <www.lib.sfu.ca> at: <http://ir.lib.sfu.calhandle/l892/112>) and, without changing the content, to translate the thesislproject or extended essays, if technically possible, to any medium or format for the purpose of preservation of the digital work. The author has further agreed that permission for multiple copying of this work for scholarly purposes may be granted by either the author or the Dean of Graduate Studies. It is understood that copying or publication of this work for financial gain shall not be allowed without the author's written permission. Permission for public performance, or limited permission for private scholarly use, of any multimedia materials forming part of this work, may have been granted by the author. This information may be found on the separately catalogued multimedia material and in the signed Partial Copyright Licence. The original Partial Copyright Licence attesting to these terms, and signed by this author, may be found in the original bound copy of this work, retained in the Simon Fraser University Archive. Simon Fraser University Library Burnaby, BC, Canada Revised: Fall 2006 SIMON FRASER UNI~ER~IW~~brary STATEMENT OF ETHICS APPROVAL The author, whose name appears on the title page of this work, has obtained, for the research described in this work, either: (a) Human research ethics approval from the Simon Fraser University Office of Research Ethics, (b) Advance approval of the animal care protocol from the University Animal Care Committee of Simon Fraser University; or has conducted the research (c) as a co-investigator, in a research project approved in advance, (d) as a member of a course approved in advance for minimal risk human research, by the Office of Research Ethics. A copy of the approval letter has been filed at the Theses Office of the University Library at the time of submission of this thesis or project. The original application for approval and letter of approval are filed with the relevant offices. Inquiries may be directed to those authorities. Simon Fraser University Library Burnaby, BC, Canada ABSTRACT In this era of global competition, companies are trying to find efficient and effective ways to market their products and services to different national cultures. One way is through product placement that utilizes the global reach of Hollywood movies. However, minimal research has been conducted that studies product placement effectiveness across cultures. The current study proposes a comprehensive model that analyzes the moderating factors of product placement across cultures: general attitude towards product placement, culture and modality. In addition, the effect of actors and individual differences are also explored. Effectiveness scores are measured using both explicit and implicit memory tests. The findings suggest that modality and culture are the only significant predictors although the influence of culture decreases with the addition of other independent variables in implicit memory measurement. iii To the most important people in my life; Budhi Ishak, Ira Sudargo, Natasha lshak and Charles Moore: "Thank you for everything". I am deeply indebted to my senior supervisor, Dr. Colleen Collins-Dodd, for her patient guidance and encouragement. This project would not have been successful without her continuous support. I also would like to thank you Dr. Mila Lazarova for her insights and generous assistance. Finally, to all of my friends and colleagues that have spent countless hours reviewing this project and giving valuable feedbacks, in particular Masud, Rajat, and Clay: thank you. TABLE OF CONTENTS .. Approval ..............................................................................................................11 ... Abstract ..............................................................................................................111 Dedication........................................................................................................... iv Acknowledgements ............................................................................................v Table of Contents ...............................................................................................vi ... List of Figures ..................................................................................................VIII List of Tables ......................................................................................................ix CHAPTER 1: REVIEW OF THE LITERATURE.................................................... 1 1. 1 Introduction.................................................................................................. 1.2 Culture ........................................................................................................1 1.2.1 Hofstede's Cultural Dimensions ..........................................................2 1.2.2 Chinese and Canadian Consumers ....................................................4 1.3 Product Placement .....................................................................................6 1. 3.1 Historical Background on Product Placement .....................................6 1.3.2 Practitioners' Perspective and Current State of the Industry............... 8 1.3.3 Research on Product Placement's Effectiveness ...............................9 1.4 Explicit vs Implicit Memory Based Tools in Measuring Product Placement Effectiveness ..........................................................................14 1.5 Model and Hypothesis ..............................................................................16 CHAPTER 2: METHODOLOGY .........................................................................19 2.1 Research Design ......................................................................................19 2.2 Study Sample ...........................................................................................19 2.3 Study Procedure....................................................................................... 19 2.3.1 Movies Selection ...............................................................................19 2.3.2 Context Testing .................................................................................20 2.3.3 Stimulus ............................................................................................21 2.3.4 Experimental Design .........................................................................21 2.4 Instrument ................................................................................................22 2.5 Pre Test ....................................................................................................24 2.6 Data Collection ........................................................................................-24 CHAPTER 3: RESULTS .....................................................................................26 3.1 Response Rate......................................................................................... 26 3.2 Sample Profile ..........................................................................................27 3.3 Revisiting the Model ................................................................................-29 3.4 Memory Measurements ............................................................................31 3.4.1 Implicit Memory Measurement - The Shopping Test ........................ 32 3.4.2 Explicit Memory Measurement - The Recognition Test ....................37 3.5 Attitude towards Product Placement ........................................................44 3.6 Scales Testing ..........................................................................................46 3.6.1 Exploring Movies............................................................................... 46 3.6.2 Source Credibility Scale ....................................................................53 3.7 Model Testing ...........................................................................................62 CHAPTER